1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF JUNE, 2026 BEFORE THE HON'BLE MR. JUSTICE H.P. SANDESH REGULAR SECOND APPEAL NO.1920/2007 (SP) BETWEEN: SRI. MOHAMMED SHARIEF S/O. PAKRUDDIN SAB AGED ABOUT 52 YEARS TAMMARIND MERCHANT R/AT NAYAKANAHATTI CHALLAKERE TALUK, CHITRADURGA DISTRICT-577536. … APPELLANT [BY SRI. B.M.SIDDAPPA, ADVOCATE] AND: 1 . ANANTHAIAH SETTY (DEAD) S/O. JANARDHANAIAH AGED ABOUT 56 YEARS OWNER OF OIL TORARY R/O. JUMMA MASJID OIL ROTARY, NAYAKANHATTI VILLAGE CHALLAKERE TALUK, CHITRADURGA DISTRICT-577501. 1(a) SMT. PRAMILAMMA W/O ANANTHA SETTY AGED ABOUT 58 YEARS RESIDING AT NO.856 POST OFFICE ROAD Digitally signed by DEVIKA M Location: HIGH COURT OF KARNATAKA 2 LAKSHMI OIL ROTARY NAYAKANAHATTY CHITRADURGA-577501. 1(b) SMT. K. ROOPA W/O HARISH BABU AGED ABOUT 41 YEARS RESIDING AT No.856 BY-PASS ROAD LAKSHMI OIL MILL POST OFFICE BADAVANE NAYAKANAHATTI CHITRADURGA-577501. 1(c) SMT. A. UMA W/O MANJUNATHA SETTY AGED ABOUT 36 YEARS R/AT HONNURU DEVAREDDY HALLI CHITRADURGA-577501. 1(d) MS. LAKSHMI K., D/O ANANTHA SETTY] AGED ABOUT 34 YEARS RESIDING AT NO.856 BY-PASS ROAD LAKSHMI OIL MILL POST OFFICE BADAVANE NAYAKANAHATTI CHITRADURGA-577501. 1(e) MS. PREETHI A., D/O ANANTHA SETTY AGED ABOUT 32 YEARS R/AT NO.856, POST OFFICE ROAD 1ST WARD, LAKSHMI OIL ROTARY POST OFFICE BADAVANE NAYAKANAHATTY VILLAGE CHITRADURGA-577501. 3 1(f) MS. NAGAMANI A., W/O ABHISHEK B.C., AGED ABOUT 30 YEARS R/AT NO.712, SANJEEVINI NILAYA 2ND MAIN, 13TH CROSS, K.T.J. NAGARA DAVANAGERE-577002. 1(g) SRI. THIPPESH A., S/O ANANTHA SETTY AGED ABOUT 28 YEARS R/AT NO.856, POST OFFICE ROAD LAKSHMI OIL ROTARY NAYAKANAHATTY VILLAGE CHITRADURGA-577501. … RESPONDENTS [BY SRI. G.S.BALAGANGADHAR, ADVOCATE R1(a to g)] THIS R.S.A. IS FILED UNDER SECTION 100 OF CPC, AGAINST THE JUDGEMENT AND DECREE DATED 03.04.2007 PASSED IN R.A.NO.322/2002 ON THE FILE OF THE CIVIL JUDGE, (SR.DN), CHALLAKERE, ALLOWING THE APPEAL AND SETTING ASIDE THE JUDGEMENT AND DECREE DATED 13.12.1999 PASSED IN O.S.NO.1168/1994 ON THE FILE OF THE CIVIL JUDGE (JR.DN), CHALLAKERE, PARTLY DECREEING THE SUIT FOR DECLARATION AND REJECTING THE RELIEF OF PERMANENT INJUNCTION. THIS R.S.A. HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 03.06.2026 THIS DAY, THE COURT PRONOUNCED THE FOLLOWING: 4 CORAM: HON'BLE MR JUSTICE H.P.SANDESH CAV JUDGMENT This second appeal is filed against the judgment and decree passed in RA No.322/2002 wherein the judgment and decree of the trial Court passed in OS No.1168/1994 was set aside and consequently dismissed the suit filed for the relief of declaration and injunction and alternatively for the relief of possession and also prayed this Court to set aside the judgment and decree of the appellate Court passed in RA No.322/2002 and restore and confirm the judgment and decree passed by the Civil Judge and JMFC (Jr.Dvn.), Challakere in OS No.1168/1994 dated 13.12.1999. 2. The factual matrix of the case of the plaintiff/appellant herein before the trial Court, while seeking the relief of declaration and injunction and alternatively for possession, that he is running oil rotary in 5 Site No.7 of Nayakanahatti Village in Challakere Taluk. He obtained license for running the same and got electricity connection from KEB, Challakere. He also obtained financial assistance from KSFC, Challakere by availing a sum of Rs.41,000/-. From the year 1999, he is running the oil rotary. He is also paying quarterly installments to the KSFC. He owes the loan price from KSFC. He is an ignorant man without worldly knowledge. He did not know reading and writing, except signing in Urdu. Prior to starting of power oil rotary, he was running the oil rotary with the bullocks. Because of increase in the oil rate and oil cakes, he started to run the rotary with electric connection. The defendant has no manner of title or possession in the suit schedule property i.e., oil rotary. The defendant is a well-versed and clever businessman. He is making an attempt to interfere in the affairs of oil rotary and he posed a threat to the enjoyment of oil mill. Therefore, he got issued a notice on 01.07.1991. Since the plaintiff/appellant 6 knew of the interference in the enjoyment of suit schedule property, he filed a suit at the first instance for relief of declaration and permanent injunction and thereafter got amended to the plaint for the relief of declaration of injunction and alternatively for the claim of possession. 3. The defendant appeared before the trial Court and resisted the suit and denied the case of the plaintiff and contented that the plaintiff has contacted him and explained difficulty in running the oil rotary business and to pay installments to the KSFC towards the loan amount. Thereafter, he also showed the default notice issued by the KSFC and expressed his inability to pay the installments and hence expressed his willingness to sell the suit schedule property and requested him to purchase the said property. Accordingly, he agreed to sell the property for a consideration of Rs.61,000/- including the loan amount of Rs.41,000/- raised from KSFC, Chitradurga. It was agreed that plaintiff/appellant should take proper steps for transfer 7 of KSFC loan and machinery to the name of the defendant and then execute the said deed and accordingly he has executed an agreement of sale on 16.01.1990 by receiving an advance amount of Rs.10,000/-. Thereafter, the plaintiff/appellant put the defendant in possession of the suit property and he had agreed to receive the balance amount on or before 20.02.1990 and to execute the registered sale deed. But subsequently he has received the additional amount of Rs.7,200/-. On
20.2.1990 leaving the balance amount of Rs.2,000/-, the plaintiff/appellant has agreed to receive the balance amount of Rs.2,800/- at the time of registration of the sale deed. Thereafter, he constructed a godown and a small residential house in the suit schedule property by spending more than Rs.60,000/- and he is residing along with his family from April,1990 and the same is in possession of himself and also he is running oil rotary. The defendant made a request to the plaintiff/appellant to transfer his oil rotary and the loan to 8 his name as per the terms of agreement. The defendant also executed a document on 30.04.1991 endorsing the earlier agreement to sell the property and receipt of Rs.7,200/- as additional amount and the defendant himself has paid the amount to the KSFC and KSFC inturn issued the demand notice for repayment of the loan to the defendant and he is in part performance of the suit schedule property under Section 53A of the Transfer of Property Act 1882, (hereinafter referred to as ‘ TP Act’ for short). Hence, he prayed the Court to dismiss the suit. 4. The trial Court having considered the pleadings as well as the material available on record, granted the relief by allowing the suit and the same is questioned before the appellate Court. The appellate Court allowed the appeal and set aside the judgment and decree of the trial Court. Hence, the present second appeal is filed before this Court. 9 5. The main contention before this Court by the plaintiff/appellant that the appellate Court has committed an error in reversing the finding of the trial Court. Admittedly according to the defendant, agreement of sale was executed on 16.01.1990 and another agreement on 30.04.1991. But no steps whatsoever has been taken by him to get the sale deed executed in his favour. But only in the suit filed by the plaintiff/appellant, defence was taken that he is ready and willing to perform his part of contract and not enforced the agreement of sale. 6. The first appellate Court grossly erred in placing the reliance on the demand notice issued to the defendant, without there being any document of contract with regard to the privity of contract between the KSFC and the defendant, or there is tripartite agreement. The first applicant committed an error in coming to the conclusion that defendant is in possession of the agreement and Exhibit. D1 is not at all registered document. It requires to 10 be registered under the provisions of the Act. Therefore, the appellate Court committed an error in not considering the said aspect. 7. This court, having considered the grounds urged in the second appeal during the course of argument on 10.12.2010, heard and admitted the appeal and framed the following substantive question of law. “Whether the lower appellate court was right in dismissing the suit filed for declaration and possession having found that the appellant/ plaintiff was the owner of the suit property?” 8. The counsel for the plaintiff/appellant in his argument would vehemently contend that it is not in dispute that plaintiff/appellant is the owner of the suit schedule property and the same is admitted by the defendant. The counsel also submits that defendant claims that there was an agreement of sale and possession was delivered. Further, the counsel would contend that suit for specific performance was not filed by the defendant based 11 on the agreement and the said agreement is also barred by limitation. Even if assuming that there was an agreement, he is entitled for only relief of money and cannot resist the suit filed for the relief of declaration and possession. 9. The appellate Court, invoked Section 55 of the Act and the same is not sustainable in the eye of law. The counsel would vehemently contend that the defendant did not acted upon in terms of the agreement. Hence, the judgment and decree of trial Court requires to be restored and confirmed and this Court has to set aside the judgment and decree of the first appellate Court. 10. The counsel also, in support of his argument, relies upon the judgment of this Court in the case of Shivayya v. Praveena and Anr., reported in AIR 2008 Karnataka 157, wherein it is held that doctrine of part performance, delay in enforcing contract Benefit of Section 53A not available, transferee who has obtained possession 12 of property in part performance of contract cannot resist suit for possession if his right to obtain specific performance is barred by limitation. 11. Per contra, the counsel appearing for the respondent would vehemently contend that Section 34 of the Specific Relief Act,1963 (hereinafter referred to as ‘Act’ for short) is discretionary and the court has to take note of the conduct of the parties and in the case on hand, the plaintiff suppressed the material fact that he has entered into an agreement of sale and received the sale consideration and also a direction to the respondent to clear the KSFC loan which is pending and no such averment is made in the plaint. The plaintiff /appellant was seeking the relief of declaration and injunction and also alternatively for possession has to approach the Court with clean hands and suppressed the agreement of sale. 13 12. The counsel would contend that Exs.D1 and D2 are marked before the trial Court and the same are admitted including the signature. The counsel also brought to notice of this Court with regard to admission on the part of PW1. by admitting the signature in Exs.D1 and D2. The counsel would also contend that when the suit was filed for the relief of permanent injunction by the plaintiff/appellant the defendant has to set out the defence that there was an agreement of sale and possession is with the defendant in the year 1991 itself. The suit for relief of declaration is amended from the year 1996 i.e., not within three years from 1991 and the same is barred by limitation and also the same is observed by the appellate Court. 13. The counsel also submits that demand notice was issued to the defendant by the KSFC in view of the agreement and handing over the possession. Since the defendant is in possession of the property and defendant only paid the loan installments to the KSFC, then the 14 plaintiff admits the possession and payment of installments by the defendant and also not rescinded the agreement, now cannot seek any relief of declaration. Nextly, the counsel invoking under Section 53A of the TP Act contend that in view of part performance, there is a shield in favour of the defendant and plaintiff/appellant is the owner is not in dispute but executed the sale agreement and delivered the possession. 14. The counsel in support of his argument relied upon judgment of the Hon'ble Apex Court in the case of Abdul Rashid vs. Smt. Suganda Kamalakar Kudtarkar reported in 2006 SCC Online Kar 590, wherein it is held that plaintiff/appellant and defendant entered into an agreement to sell their property and defendant was put in possession of such property after receiving part of consideration by the plaintiff. Later on, the plaintiff repudiated or represented the said agreement of sale and sought possession and mesne profits. The plaintiff filed 15 suit for possession without seeking prayer for declaration at that time and the agreement between the parties has been voided and become unenforceable and hence, suit itself was not maintainable without the prayer for declaration of cancellation of agreement. 15. The counsel also relied upon the judgment of the Hon'ble Apex Court in the case of Shrimant Shamrao Suryavanshi vs. Pralhad Bhairoba Suryavanshi reported in (2002) 3 Supreme Court Cases 676, wherein, the observation of this Court that Section 53A is very clear that transfer in part-performance of agreement of sale, person obtaining possession of the property in part- performance of agreement of sale can defend his possession in a suit for recovery of possession filed by the transferor by subsequent transferee of the property claiming under him, even if a suit for specific performance and agreement of sale has become barred by limitation. 16 16. Having considered the principles laid down in the judgments of this Court and also the judgment of the Hon'ble Apex Court supra which are relied upon by both the appellant’s counsel and also the counsel appearing for the respondent and also taking note of material i.e., pleading as well as the events that have occurred, it is not in dispute that the suit schedule property belongs to the plaintiff. It has to be noted that the plaintiff has filed suit for the relief of permanent injunction at the first instance and when the defendant comes up before the trial Court, contending that there was an agreement of sale and possession was handed over including the loan amount is payable by the defendant to KSFC. Subsequently suit was amended for the relief of declaration. The Court has to take note of the fact that in the suit for relief of permanent injunction filed by the plaintiff/appellant, nothing is averred with regard to the entering into an agreement of sale and sale was suppressed by the plaintiff/appellant and also it has to be noted that 17 when the defendant set up the sale agreement and delivery of possession, alternative relief is sought for the relief of possession apart from the relief of declaration and injunction. But the fact is that the defence was set up in the year 1991. But suit was amended in the year 1996. Apart from the documents at Exs.D1 and D2, signatures found in the said document of plaintiff/appellant, which he was admitted. But only contention was taken that he was an innocent and not having any worldly affairs and knows only to make the signature and not aware of the contents. But the appellate Court took note of the fact that at the first instance agreement was entered and subsequently document of Ex.D2 came into existence, reiterating the earlier agreement and also receipt of balance amount upto Rs.10,000/- as well as additional amount. Hence, the appellate Court rightly comes to the conclusion that the contentions of the plaintiff/appellant cannot be accepted that he was not aware of the contents of the document 18 Exs.D1 and D2 and both agreements came into existence on different dates. 17. It is also important to note that in the Ex.D1 itself, it is mentioned that the loan which was pending with the KSFC which includes the sale consideration i.e., an amount of Rs.41,000/- and apart from that Rs.41,000/-, additional amount of Rs.20,000/- was the sale consideration. 18. It is also taken note of by the appellate Court that demand notice was issued to the defendant and subsequently defendant also paid the amount in favour of KSFC. In order to substantiate the sale, documents of ‘D’ series are also marked and when such material was taken note of by the appellate Court and also when the possession was recovered under the agreement at Ex.D1 and D2, the appellate Court rightly comes to the conclusion that Section 53A of the TP Act applies. No doubt, counsel 19 appears for the plaintiff/ appellant based upon the judgment of this Court i.e., reported in AIR 2008 Karnataka 157, wherein it is held that transferee who has obtained possession of property in part-performance of contract cannot resist suit for possession, if his right to obtain specific performance is barred by limitation. Earlier in 2006, prior to the judgment of the High Court of Karnataka, the Hon'ble Apex Court in its judgment held that later on plaintiff repudiated or publicly rescinded the said agreement of sale and sought for possession and mesne profits. Further, the plaintiff/appellant has filed suit for possession without seeking prayer for declaration that the agreement between the parties has been void or become unenforceable and held that suit itself was not maintainable without the prayer for declaration. Prior to the judgment of the High Court of Karnataka, Hon'ble Apex Court held that suit itself is not maintainable. In the case on hand also, it has to be noted that the plaintiff/appellant has not 20 sought for any relief or cancellation of the agreement executed by him, but suppressed the same when the suit was filed for the relief of permanent injunction and only subsequent to the defendant filed the written statement with defence of agreement of sale and got amended the suit for relief of declaration and the Hon'ble Apex Court in the subsequent judgment referred supra, prior to the judgment in 2008 itself, also held that transferee in part- performance of agreement are the same and obtaining possession of the property in part-performance of the agreement can resist his possession in a suit for recovery of possession filed by the transferees. Even if a suit for specific performance of the agreement of sale has become barred by limitation. 19. Having considered the principles laid down in the judgments of the Hon'ble Apex Court, the judgment of the High Court of Karnataka will not come to the aid of plaintiff/appellant and the law is settled. Even if no specific 21 relief is sought by the agreement holder, he can resist the suit in view of Section 53A of the TP Act, as he is in part- performance of the contract. Under the circumstances, I do not find any force in the contention of the appellant’s counsel. No doubt, the plaintiff/appellant is the owner of the suit schedule property but the appellate Court has rightly dismissed the suit for relief of declaration and there was sale of agreement and possession was delivered and even not sought for any relief of declaration to declare the agreement which was entered between the plaintiff/appellant and defendant is liable to be cancelled and when such relief is not sought for as held by the Hon'ble Apex Court, as well as when there is an admission with regard to the execution of the sale agreement and delivery of possession, appellate Court has not committed any error. Hence, I answer the substantive question of law as negative. 22 20. In view of the discussions made above, I proceed to pass the following: ORDER Regular Second Appeal is dismissed. Sd/- (H.P. SANDESH) JUDGE SSD